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But Elan faced ruin in 2002 after its Alzheimer's trials failed and the company was caught hiding losses in Enron-style accounting tricks. A new management team led by former Merrill Lynch banker Kelly Martin drastically pared down Elan and focused on developing Tysabri. The intravenously delivered drug was designed to slow or halt the paralyzing effects of MS, an incurable disease of the central nervous system that afflicts millions worldwide. Tysabri, a joint venture with the Massachusetts-based drugmaker Biogen Idec, faced disaster after its launch in 2005 when it was linked to development of a rare, often fatal brain-inflammation disease. But Elan and Biogen Idec persuaded U.S. and European regulators to put Tysabri back on the market in 2006 and the drug, prescribed under restricted rules reflecting its risks, has steadily grown to become a world-leading treatment for MS patients. Elan sold much of its ownership share of Tysabri to Biogen Idec in February for $3.25 billion in cash and a minority share in future royalties. That deal opened up a behind-the-scenes scramble among several U.S.-based companies to acquire Elan for its healthy cash flow and Irish tax base. The agreement with Biogen Idec means New Perrigo would collect up to 25 percent of future royalties from Tysabri, which had global sales of $1.6 billion last year. Perrigo's proposed takeover of Elan, subject to regulatory approval in the United States and Ireland, is expected to be completed by the end of 2013.
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